Chinese Economic Growth: How Will It Affect the U.S. Gains from Trade? (CRS Report for Congress)
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| Release Date |
Revised July 26, 2007 |
| Report Number |
RL33744 |
| Report Type |
Report |
| Authors |
Craig K. Elwell, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
With expanding trade with growing emerging economies that have changingresource endowments, the U.S. economy's terms of trade may move as this growthcauses changes in the worldwide demand for and supply of the goods and servicesthat the United States exports and imports. Given its current and prospective size,China's impact on these forces could be large. China's main impact on the U.S.terms of trade over the last decade has been through the falling price of U.S. importsfrom China, transmitting a favorable impulse to the U.S. terms of trade. It also seemslikely that the impact of the economic growth of China on the U.S. terms of tradeover the near term will continue to be dominated by the favorable effects of a fallingprice for imports from China. Over the longer term, conclusions are more tentative.Several factors point to a favorable outcome for the United States; however, somedeterioration of the U.S. terms of trade may be the unavoidable consequence ofsuccessful economic development in large emerging economies such as China (aswell as India, Russia, and Brazil). The economic benefit to the world economy fromlarge numbers of people accomplishing the very difficult transformation from povertyto a steadily rising standard of living is great.
